Graduate salaries 'force them to rent'

News Category: Industry News

Factors like low starting salaries and a lack of equity are likely to mean many graduates have to rent for many years, an industry expert has suggested.

A report from the Hay Group found that the typical graduate salary in 2007 is just £20,812. While this is 2.5 per cent more than in 2006, Lucian Cook, a researcher from Savills, suggested that wages were not rising fast enough to counter soaring house prices.

This meant that many graduates would have little choice but to rent a home for several years, she explained.

Ms Cook added: "The figures have shifted very dramatically over the past five years, so that will mean that a lot of people simply are not going to meet that sort of income level to enable them to get on the housing ladder as quickly as perhaps they thought they might have done."

Ms Cook also pointed out that many recent graduates were unable to raise the deposit to purchase a home unless they had parents who could lend them the money. Those without parents able to provide financial help would have to live in rented accommodation until they had saved some equity.

A study by Scottish Widows recently found that around ten per cent of recent graduates believe they will have to rent for their whole life.